We assign a fundamental rating of 7 out of 10 to CLS. CLS was compared to 123 industry peers in the Electronic Equipment, Instruments & Components industry. CLS gets an excellent profitability rating and is at the same time showing great financial health properties. CLS is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make CLS suitable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CLS had positive earnings in the past year.
In the past year CLS had a positive cash flow from operations.
CLS had positive earnings in each of the past 5 years.
In the past 5 years CLS always reported a positive cash flow from operatings.

1.2 Ratios

CLS's Return On Assets of 10.85% is amongst the best of the industry. CLS outperforms 91.87% of its industry peers.
The Return On Equity of CLS (35.33%) is better than 95.94% of its industry peers.
With an excellent Return On Invested Capital value of 21.33%, CLS belongs to the best of the industry, outperforming 96.75% of the companies in the same industry.
CLS had an Average Return On Invested Capital over the past 3 years of 11.43%. This is above the industry average of 8.87%.
The last Return On Invested Capital (21.33%) for CLS is above the 3 year average (11.43%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	10.85%
ROE	35.33%
ROIC	21.33%

ROA(3y)4.63%

ROA(5y)3.55%

ROE(3y)15.02%

ROE(5y)11.3%

ROIC(3y)11.43%

ROIC(5y)8.93%

1.3 Margins

With a decent Profit Margin value of 6.35%, CLS is doing good in the industry, outperforming 72.36% of the companies in the same industry.
CLS's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 7.33%, CLS is in the better half of the industry, outperforming 71.54% of the companies in the same industry.
In the last couple of years the Operating Margin of CLS has grown nicely.
Looking at the Gross Margin, with a value of 12.04%, CLS is doing worse than 76.42% of the companies in the same industry.
CLS's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	7.33%
PM (TTM)	6.35%
GM	12.04%

OM growth 3Y24.27%

OM growth 5Y29.03%

PM growth 3Y34%

PM growth 5Y30.13%

GM growth 3Y8.03%

GM growth 5Y10.39%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CLS is creating value.
CLS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CLS has been reduced compared to 5 years ago.
The debt/assets ratio for CLS is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 7.47 indicates that CLS is not in any danger for bankruptcy at the moment.
CLS has a Altman-Z score of 7.47. This is amongst the best in the industry. CLS outperforms 82.11% of its industry peers.
CLS has a debt to FCF ratio of 1.97. This is a very positive value and a sign of high solvency as it would only need 1.97 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.97, CLS is doing good in the industry, outperforming 78.05% of the companies in the same industry.
A Debt/Equity ratio of 0.37 indicates that CLS is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.37, CLS is not doing good in the industry: 60.16% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for CLS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.37
Debt/FCF	1.97
Altman-Z	7.47

ROIC/WACC2.67

WACC7.99%

2.3 Liquidity

CLS has a Current Ratio of 1.47. This is a normal value and indicates that CLS is financially healthy and should not expect problems in meeting its short term obligations.
CLS's Current ratio of 1.47 is on the low side compared to the rest of the industry. CLS is outperformed by 75.61% of its industry peers.
A Quick Ratio of 0.88 indicates that CLS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.88, CLS is doing worse than 85.37% of the companies in the same industry.
CLS does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.47
Quick Ratio	0.88

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 47.90% over the past year.
Measured over the past years, CLS shows a very strong growth in Earnings Per Share. The EPS has been growing by 48.11% on average per year.
The Revenue has grown by 22.09% in the past year. This is a very strong growth!
Measured over the past years, CLS shows a quite strong growth in Revenue. The Revenue has been growing by 10.38% on average per year.

EPS 1Y (TTM)47.9%

EPS 3Y44.1%

EPS 5Y48.11%

EPS Q2Q%51.92%

Revenue 1Y (TTM)22.09%

Revenue growth 3Y19.63%

Revenue growth 5Y10.38%

Sales Q2Q%27.79%

3.2 Future

CLS is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 38.14% yearly.
CLS is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.74% yearly.

EPS Next Y53.05%

EPS Next 2Y46.37%

EPS Next 3Y43.28%

EPS Next 5Y38.14%

Revenue Next Year26.52%

Revenue Next 2Y29.69%

Revenue Next 3Y30.76%

Revenue Next 5Y27.74%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 65.38, the valuation of CLS can be described as expensive.
CLS's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.60, CLS is valued quite expensively.
Based on the Price/Forward Earnings ratio of 41.10, the valuation of CLS can be described as expensive.
CLS's Price/Forward Earnings is on the same level as the industry average.
CLS is valuated expensively when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	65.38
Fwd PE	41.1

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CLS is on the same level as its industry peers.
CLS's Price/Free Cash Flow is on the same level as the industry average.

		Industry Rank	Sector Rank
P/FCF	99.74
EV/EBITDA	39.22

4.3 Compensation for Growth

CLS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of CLS may justify a higher PE ratio.
A more expensive valuation may be justified as CLS's earnings are expected to grow with 43.27% in the coming years.